Shell s Colorado Oil Shale Freeze Wall Test

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Shell s Colorado Oil Shale Freeze Wall Test 31 st Oil Shale Symposium Golden, Colorado October 17-21, 2011 Wolfgang Deeg, Sepehr Arbabi, Larry Crump, Erik Hansen, Ming Lin Shell International Exploration & Production Inc.

DEFINITIONS AND CAUTIONARY NOTE The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this presentation Shell, Shell group and Royal Dutch Shell are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words we, us and our are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. Subsidiaries, Shell subsidiaries and Shell companies as used in this presentation refer to companies in which Royal Dutch Shell either directly or indirectly has control, by having either a majority of the voting rights or the right to exercise a controlling influence. The companies in which Shell has significant influence but not control are referred to as associated companies or associates and companies in which Shell has joint control are referred to as jointly controlled entities. In this presentation, associates and jointly controlled entities are also referred to as equity-accounted investments. The term Shell interest is used for convenience to indicate the direct and/or indirect (for example, through our 24% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest. This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as anticipate, believe, could, estimate, expect, intend, may, plan, objectives, outlook, probably, project, will, seek, target, risks, goals, should and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including potential litigation and regulatory measures as a result of climate changes; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell s 20-F for the year ended 31 December, 2010 (available at www.shell.com/investor and www.sec.gov ). These factors also should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, 18 October 2011. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation. There can be no assurance that dividend payments will match or exceed those set out in this presentation in the future, or that they will be made at all. We use certain terms in this presentation, such as discovery potential, that the United States Securities and Exchange Commission (SEC) guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330. 2

The Target In-situ conversion of kerogen in oil shale to producible hydrocarbons Requires Means to contain product to maximize recovery Means to protect and exclude ground water 3

Containment Systems Natural Process volume surrounded by impermeable formation excluding water and containing conversion products to maximize recovery Gas storage cavern (leached salt dome) Shell s East RDD Project Combination: Natural and Modified Subsurface Roof and floor rely on natural seals Around periphery permeability sealed by Subsurface or formation grouting Ground freezing if porosity is water filled 4

Freeze Wall Test Location FWT 5

Freeze Wall Test Project Demonstrate that a freeze wall is a robust containment system for commercial oil shale development Evaluate and Test Two containment methods Freeze Wall Grout Wall Dual containment system consisting of external and internal freeze walls separated by a fluid filled compartment Techniques for freeze monitoring freeze wall formation, detecting breaching, and locating breaches B A C 6

The Freeze Wall Test Site 2 3 1 Facility to assess viability of a freeze wall for ICP subsurface containment. Comprises: 1. Control room, process and data acquisition buildings, offices, and warehouse 2. Three refrigeration units and associated circulation systems (pumps and piping) 3. The freeze ring where the testing was conducted as well as surrounding monitoring wells 4. Additional monitoring and injection wells on remote pads (not shown) 7

Freeze Wall Formation Tank Refrigeration Units Pumps Formed by circulating chilled aqua ammonia through 136 dedicated freeze holes Total cooled subsurface length: 212,800 feet (40 miles) Facilities included: Three refrigeration units Three circulation pumps Freeze Holes 8

Freeze Wall Closure 640 635 630 Pressure Observed in the Lower L4 in 5647-MZP Freeze wall closed across entire commercial interval in Oct. 09 Closure confirmed in Dec. 09 and Jan. 10 by: Pressure (psi) 625 620 615 610 605 600 9/1 9/8 9/15 9/22 9/29 10/6 10/13 10/20 10/27 11/3 Continued water level rise inside freeze wall following wall closure. Lack of pressure communication across freeze wall in response to active pumping inside and outside the freeze wall Absence of temperature spikes in Dec. 09 freeze hole temperature build-up Temperature spikes are caused by warmer water flowing through a location where the freeze wall has not yet fully formed. 1,454 ft Empire State Building Uinta A-Gr B-Gr L-5 L-4-U L-4-L L-3 Surface 1,100 ft 1,500 ft 1,700 ft Schematic of Freeze Wall Test interval Closed around periphery across entire commercial interval 9

Freeze Wall Pressure Test: Low Internal Pressure Reduce pressure in each zone tested to 100 psi Saw no pressure response in test interval outside freeze wall for each zone tested Confirmed wall closure and integrity in that zone Achieved following inside to outside pressure d(water Level) (ft) 100 0-100 -200-300 -400-500 -600 Test Cell C Dewatering 03 - Water Level Changes Noted in MZP Hole 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 Time from start (min) Uinta B-Groove L-5 Upper L-4 Lower L-4 Stop Pump differentials: A-Groove: 227 psi B-Groove: 263 psi L-5: 259 psi L-3: 430 psi 10

Pressure Test of Freeze Wall: High Internal Pressure Raised pressure inside cell B until wall breached. Test involved an intentional breach A Division wall between cells B and C breached somewhere above 550 Breaching confirmed by pressure response in cell C Surface pressure when wall breached: ~150 psi Breach healed as soon as pumping into cell B was halted Minimal flow through breach No breach associated temperature change noted in cell B division wall freeze holes Flow period too short to determine exact breach location. B C Division wall breached above 550. 11

Evaluation of Containment Systems Freeze wall optimum Impermeable once formed Cell A 1,700 deep freeze holes 1,500 deep freeze holes 1,500 deep FC holes Grout wall leaked At least one natural fracture not sealed by grout Dual freeze wall test Successfully breached wall twice. Both times wall rehealed almost instantaneously Breach induced likely not natural fracture Cell B Cell C Well 5506 Temperature Logs 400 500 Induced fracture width too small when pressure 600 A-Groove reduced to sustain flow Depth (ft) 700 Result: Closure and rapid re-freezing of fracture 800 900 B-Groove L5 1,000 0 5 10 15 20 25 30 35 40 45 50 Temperature (deg F) 12

North Wall Breach: Will Wall Unzip? Wall breached Aug. 31, 2010 using dedicated breaching well located in center of freeze wall 25 tall breach located in the test interval Breaching pressure: 2.95 psi/ft Breach kept open for 75+ days without growing Produced 2 gpm water from test cell at 410 to 475 foot outside to inside head difference Flow through breach remained constant Verified unzipping of wall in test interval unlikely in fractured formation due to highly localized flow channels Breach repaired via pressure equalization across freeze wall 13

FWT Site: Current Status 1,700 deep freeze holes 1,500 deep freeze holes 1,500 deep FC holes Cell A Legend: Cell B Subsurface frozen Cell C 14

Freeze Wall Test Completed Objective: Demonstrate freeze wall is robust oil shale subsurface ICP containment system Can we form freeze wall on commercial acreage? Is freeze wall robust? How strong is the freeze wall? Can we detect and locate failures? 1,454 ft Uinta Surface Schematic of Freeze Wall Freeze Wall Test Accomplishments: 1. Confirmed freeze wall forms across entire commercial interval A-Gr Closed 2. Demonstrated freeze wall withstands expected B-Gr around commercial inside to outside pressure differential. L-5 L-4-U L-4-L 1,100 ft periphery across entire commercial 3. Tested Freeze wall to over 150 psi above full hydrostatic head. 4. Demonstrated ability to monitor freeze wall L-3 1,500 ft interval formation and to detect and locate breaches in Empire State Building 1,700 ft the freeze wall. 15

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